Treat v. Burns

WASTE, C. J.

Plaintiff appeals from an adverse judgment entered in this action to foreclose a chattel mortgage. Defendant Coffin failed to appear in the action and her default was duly entered.

[217]

It appears from the evidence that one Max Rosenberg advanced to plaintiff and her husband the necessary money with which to purchase the lease and furnishings of a certain hotel. After conducting the establishment for a time plaintiff sold the lease and furnishings to defendant Julia A. Coffin for $2,800, the purchaser paying $1200 in cash and giving her note and chattel mortgage on the furnishings for the $1600 balance, which balance at the time of the trial had been reduced to $1400. The note and mortgage bear date July 12, 1927, and because of Rosenberg’s financial backing in the undertaking plaintiff had them run in his favor. On July 12, 1929, the note was indorsed over to the plaintiff. Such transfer of the indebtedness carried the security with it as an incident thereto. (Sec. 2936, Civ. Code;

Adler

v.

Sargent,

109 Cal. 42, 48 [41 Pac. 799].) At the time of its execution and delivery the mortgage failed to comply with the provisions of section 2'957 of the Civil Code in that it was not then accompanied by the usual “good faith” affidavit nor was it then recorded. Subsequently, and about July 6, 1928, Mrs. Coffin, the purchaser and plaintiff’s mortgagor, sold the lease and furnishings to the defendant Burns for $1600, the latter paying $400 in cash and executing and delivering her note and chattel mortgage to Mrs. Coffin to secure the balance. The bill of sale running from Mrs. Coffin to the defendant Burns was duly recorded on July 6, 1928. It was after this that plaintiff’s mortgage was made to comply with section 2957,

supra,

and thereupon recorded. It necessarily follows, therefore, that defendant’s bill of sale, though subsequent in point of time, takes priority over and is not subject to plaintiff’s chattel mortgage, unless it appears that defendant had

actual